Thursday, November 02, 2006

Economists argue about religion 

An artice in this week's Chronicle of Higher Education (temp link, permalink for Chron subscribers only) highlights a new book by Robert Ekelund, Jr., Robert Hebert and Robert Tollison called The Marketplace of Christianity. Good neoclassical economists, their book largely argues that when you reduce the price of salvation, people want more of it (or more people want it.) In short, beginning with Luther, Christian churches have competed for congregants by increasing the range of products offered and lowering the price one must pay to gain eternity. people become more affluent and modern, they persistently demand lower-priced religions. The authors explain that churchgoers are "buying" a large variety of goods and services when they join a congregation � "social services, political cohesion, access to business contacts, reduced information costs (e.g., with respect to dating and marriage), and so on."

But at the heart of the religious "purchase," Mr. Ekelund says, are "assurances of eternal salvation. That seems to us to be the core product of religion."

And people in rich, stable, scientific societies, the authors believe, generally are not willing to pay very much for that core product. They want to go to church once a week (or less), not daily; they aren't willing to tithe 10 percent of their income; and they don't want church-enforced personal sacrifice, such as fasts.

Mr. Ekelund does not expect demand for religion to ever disappear � "There's an existential angst concerning human existence," he says, "and that existential angst is certainly not going to be quelled by any form of science" � but he does believe that modern Westerners will continue to demand forms of religion that are "cheaper" in terms of the time, money, and personal sacrifices religions require.

An interesting exchange in the article occurs between Ekelund and Laurence Iannaccone, who has written about the increasing popularity of stricter, more fundamental sects. (See this interview with Russell Roberts on EconTalk, for example.)
Within certain limits, Mr. Iannaccone says, conservative denominations are healthier and more stable than liberal ones. People often prefer more-demanding churches, he argues, because they want to be assured that their fellow churchgoers are not "free riding" and receiving the church's goods without making sacrifices.

"I would argue otherwise," Mr. Ekelund says. "Over the long run, I think it's clear that the changes in demand for religion are in the direction of less-demanding, more-philosophical religions."

But Mr. Tollison concedes that, as far as he is concerned, Mr. Iannaccone has identified a genuine enigma. "In normal economic theory, constraints on your behavior are not seen as an economic good," he says. And yet it seems clear, Mr. Tollison says, that some people do indeed seek out churches precisely because they enforce strict norms against, say, drinking and casual sex.

I'm not sure why that's such a mystery. We have a range of services offered in the market where the customer pays a service provider who gets the customer to do something that is eventually good for them but has short-run costs that the customer might not choose to do on his or her own. We have diet centers and personal trainers and, well, higher education to help us make credible commitments to increasing our human capital. Why not churches too?